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Malaysia: GDP for 3Q likely to be stronger
PETALING JAYA: Despite slower expansion of the industrial production index (IPI) for September this year, the gross domestic product (GDP) growth for the third quarter (3Q22) is expected to be stronger than 2Q22 but set to slow down in 4Q22.
The domestic economy in 2Q22 expanded by 8.9% year-on-year (y-o-y) from 5% y-o-y in 1Q22.
The Finance Ministry, when tabling Budget 2023, forecast GDP growth of between 4% and 5% for 2023 compared with between 6.5% and 7% for this year.
AmBank Research Group chief economist Anthony Dass said with the latest industrial products numbers continuing to grow by double-digit, plus strong exports and private consumption, he expects the 3Q22 GDP could grow by 12.2% y-o-y, better than 2Q22’s growth of 8.9%.
“We are also maintaining our all-year GDP forecast at 7.5% (base-case), with an upside of 8.5%,” he added.
“For October, we may see softer manufacturing activities, taking cue from the deeper contractions in recent Manufacturing Purchasing Managers’ Index (PMI) and higher base effects. The headline global reading fell to 48.7 in October from 49.1 in the previous months, due to slump in global market conditions and muted customer demand,” he noted.TA Research expects Malaysia’s 3Q22 GDP growth to be outstanding at 10.5% y-o-y compared with a consensus 12.1% y-o-y growth after expanding by almost 9% in the 2Q22. “We are cautiously optimistic on the economic performance for the 4Q22 following the contraction seen in the Malaysian manufacturing sector.”
In October 2022, Malaysia’s headline Manufacturing PMI contracted again due to sluggish global market conditions and muted customer demand.
“The seasonally adjusted S&P Global Malaysia Manufacturing PMI fell to 48.7 from 49.1 in the previous month,” it said.
Malaysia’s IPI in September expanded by 10.8% y-o-y, which is a slower pace relative to previous month’s number of 13.5% y-o-y. This brings the year-to-date growth for industrial products is 7.9% (2021: 8.8%).
On a month-on-month basis, the overall production increased by 1.3% (August 2022: 3.9%).
The export-oriented industries grew 10.1% y-oy (August:12.4%) while the domestic-oriented industries advanced 11.2% y-o-y (August: 22.5%).
Source: https://www.thestar.com.my/business/business-news/2022/11/10/gdp-for-3qlikely-to-be-stronger